GGRAsia – China’s online lottery stay leaves 500.com in red

China’s online lottery stay leaves 500.com in red

Jul 30, 2015 Newsdesk Industry Talk, Latest News

China’s temporary suspension of online lottery sales has left New York-listed 500.com Ltd with no revenue sources whatsoever in the second quarter of 2015, the company said.

That meant the firm, an online sports lottery service provider to the mainland China market, posted a net loss of RMB81.4 million (US$13.1 million) for the period, compared with net profit of RMB75.4 million during the second quarter of 2014.

“Since March 2015, all provincial sports lottery administration centres to which the company provides sports lottery sales services have temporarily suspended accepting online purchase orders for lottery products,” following instructions from China’s central authorities issued on January 15, 500.com said in a press release on Wednesday.

It added: “As a result of the provincial sport lottery administration centres’ decision to temporarily suspend accepting online lottery orders… the company did not generate any revenue from sports lottery sales in the second quarter of 2015.”

The temporary stay, jointly promulgated by China’s Ministry of Finance, the Ministry of Civil Affairs and the General Administration of Sports, has the stated aim of tackling unauthorised lottery sales in mainland China.

“We want to restate that the company was one of the two entities approved by the Ministry of Finance in 2012 to provide online lottery sales services on behalf of the China Sports Lottery Administration Centre,” 500.com chief executive Pan Zhengming said in a prepared statement.

He added: “To the best of the company’s knowledge, the approval by the Ministry of Finance for the company to provide online lottery sales services on behalf of the China Sports Lottery Administration Centre is valid and has not been revoked or amended.”

Shenzhen-based 500.com said it would not make an earnings forecast until “it receives clear instruction on the resumption date of online sports lottery sales from the Ministry of Finance.”

Meanwhile, the company confirmed the appointment of Zhao Weiguo as a director. Mr Zhao is the chairman of Tsinghua Unigroup International Co Ltd, a firm that last month acquired a 15.2 percent stake in 500.com.